Council tax benefit bombshell to hit society's poorest

Council tax bill Some of the poorest people will be paying council tax for the first time

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Another benefits bombshell could be on the way for some of the poorest in society.

Just as they adjust to the idea that their benefits will rise below inflation for the next three years, some now also face paying council tax for the first time.

The government is scrapping the national council tax benefit scheme from April.

Instead local authorities will have to draw up their own methods of supporting people on benefits and low incomes.

They will still get some funding from government but - and here's the catch - they'll only get 90% of what was needed to fund the support this year.

Poorest people

That leaves councils facing a dilemma on how to make up that shortfall.

The government has said councils cannot remove council tax benefit from pensioners, but it can look to ask people of working age to contribute.

That could leave councils turning to the poorest people to fill the gap.

Start Quote

Judith Wallace

The majority do feel that everyone should make some contribution”

End Quote Councillor Judith Wallace Deputy Mayor, North Tyneside

North Tyneside Council estimates it is £1.8m short of having enough money to fully fund existing council tax benefit claims.

It is therefore considering asking all working age council tax payers to contribute at least 20% of their tax bill.

That could mean a bill of at least £200 for people who have so far avoided the tax altogether.

The Conservative mayor and cabinet say the scheme would make sure that maintenance, child benefit and some disability payments were excluded when calculating people's incomes.

The poorest would also be offered weekly payment plans to help them budget.

Public support

But the council believes it is right to ask everyone - including people on limited means - to make a contribution.

It says a public consultation also showed support for the idea.

Councillor Judith Wallace, who is deputy mayor, said: "The alternative would be to take £1.8m out of services and we don't want to see those hit.

Council tax benefit claimants in a cafe Council tax benefit claimants like Denise, Philippa and Colin face a bill of at least £200

"And indeed the response of residents in North Tyneside indicated the majority do feel that everyone should make some contribution."

That's worrying some of the 12,500 people who'll have to pay up though.

Meadowell is one of the poorest parts of North Tyneside with high numbers of benefit claimants.

Single dad Colin Banks had to give up his job to look after his child.

He says he could not afford to pay £200 in council tax.

He added: "That's not just asking me to live on less than I'm physically able to live on, but asking my child to do the same."

Denise Downey is working, but only part-time for £500 per month, and under the scheme will be asked to pay a larger share of the tax.

She said: "To me it would be a struggle. It might have to be a choice between paying it and having enough money to feed myself and pay my gas and electricity.

Start Quote

Denise Downey

It might have to be a choice between paying it and having enough money to feed myself”

End Quote Denise Downey Council tax benefit claimant

"It's going to end up with a lot of people in arrears and being taken to court."

Higher bills

There is still time for a rethink as the plans still have to go to a full council meeting where Labour could vote them down.

But there are Labour local authorities also planning to ask the poorest to pay.

Newcastle and Sunderland are considering asking for at least an 8.5% contribution.

South Tyneside may look for a minimum 30% contribution from the non-disabled. That could lead to bills of £250 or more for those on benefits or low pay.

Some though believe they need to protect the people who currently claim council tax benefit.

Northumberland County Council is proposing that nobody misses out, as are Copeland and Eden with current protections retained.

And Durham County Council has just approved a similar scheme.

It is looking to plug the £5.5 million funding gap by abolishing some current council tax exemptions.

Empty homes Councils can now raise council tax on empty homes to help fill the funding gap

Second home owners will no longer get a 10% discount and owners of empty homes will be asked to pay full council tax for the first time. Indeed any homes left empty for more than two years will face a bill for 150% of the tax.

But the council admits it can only guarantee that protection for this year.

Deputy leader Alan Napier said: "If we had passed that shortfall on, the average working age family on council tax benefit would have been faced with an extra £250 to pay. That's money they just haven't got."

Government help

The government says it is offering councils help though, including the powers Durham has used to remove exemptions.

In addition, local authorities that decide to restrict the tax demand to 8.5% for the poorest claimants will get access to a £100m transitional fund.

Start Quote

Alan Napier

As a footballer I'd say this is a hospital pass from the government”

End Quote Councillor Alan Napier Deputy leader, Durham County Council

But that money is on offer for one year only, and it might not cover the full shortfall.

What local authorities will be praying for is economic revival.

Falling unemployment and rising salaries would lead to a fall in those needing council tax support.

But Durham County Council says even at a time where unemployment has fallen, it has seen 1,700 extra people claim council tax benefit.

Mr Napier added: "As a footballer I'd say this is a hospital pass from the government. They're cutting the amount of support while we're actually seeing the number of claimants go up."

And with the jobless total predicted to rise this year, the strain on councils could grow in 2013.

Many fear the government will also look to cut support again in future years.

So even the people who are protected this year, could find themselves paying council tax sooner or later.

Richard Moss Article written by Richard Moss Richard Moss Political editor, North East & Cumbria

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  • rate this

    Comment number 51.

    All income should be counted after tax Income from Shares. Bank accounts. disability. child allowance. Even free School meals. Then tax can be worked out fairly for every one, But of course a lot wont like this, just want a free ride.

  • rate this

    Comment number 50.

    This is putting people on Benefits into a Multi Tier of poverty as some councils will be charging 8.5% while others will go up to the maximum allowed by Law of 30%. People on Benefits get the same sum of money which "The Law" says they require to live on. This means that some people will have more money left out of their allowance than others. This Law cannot be right...

  • rate this

    Comment number 49.

    Is it not right that all working age people should pay at least some council tax? Or should some people be funded entirely by others?

  • rate this

    Comment number 48.

    I live in the Epping Forest Council Area, Chigwell to be precise. We have been asked to pay 20% of our Council Tax as of April. I am unable to find the money to make this payment, I am finding it very hard to feed myself and heat my home at the moment and I am very distressed about this whole problem the Gov./ Council has put on me, I feel like we are living in OLIVER TWISTS DAYS. Please Help

  • rate this

    Comment number 47.

    This is madness, JSA is according to the government the minium you need to live on and now i've got to payout more, lifes hard enough if your not working. I've only been out of work for 3 months and i've sold almost everything just to pay the bills and i'm an engineer. So im used to earning goood money.

  • rate this

    Comment number 46.

    Essential bills up by 9%.Benefits frozen at 1%.Food prices up.Petrol prices rising.Whilst *ankers recieve massive bonuses for failure.And our doors are open to allcomers.Sorry cant to pay £280 a year so I will be 1 of them waiting for a court summons.

  • rate this

    Comment number 45.

    It’s great to live in a free country, work hard save to buy a second home and pay the council an extra 90% council tax for the privilege, now another 60% tax, this is to ‘encourage’ me to rent or sell it against my wishes. In the same way they encourage you to move into a house with fewer bedrooms, recycle, or be energy efficient. Cash to refurbish and furnish their own second homes perhaps?

  • rate this

    Comment number 44.

    “TAX THE RICH!” great idea Monty (41) penalise the educated and successful, perhaps we should only entertain those who have never worked a day in their life and have the benefit system pay the Council Tax. You do know of course that second home owners currently pay 100% on their main home and 90% (rising to 150%) tax on their second home don’t you, that would be just dumb if you didn’t.

  • Comment number 43.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 42.

    the goverment needs to rethink it policy first bedroom tax housing associations 1 bedroom flats etc over £100 pound taking benefits away
    camerons excuse private landlords/tenants only get per room
    yes but a 3 bedroom house works out at £1,350 per month profit house owner not goverment
    on benefit £85 to £115 per family if working money to council
    then whatever they charge community tax

  • rate this

    Comment number 41.

    They certainly should start taxing second home owners, the wealthy have had it good for to long. Where I live it's littered with second homes, and all exempt from council tax, that will be a good change, and quite frankly in times like these if you can afford one house to live in, and a country retreat to relax in after a tiring 39 hr week then you should be paying through the nose, TAX THE RICH!

  • rate this

    Comment number 40.

    income tax, national insurance, council tax, VAT, taxed on my pension, so paying twice, now't left. id better prepay for my funeral, don't think they've taxed that yet.
    sick of political rhetoric.
    give the problem to a 1st year economics grad, and you might get the facts, instead of figures being banded around
    my local council gives it's precept to charity is that legal?????

  • rate this

    Comment number 39.

    I live alone, essentially housebound, and my income is only ESA and DLA . I am now waiting to hear the details of whether I've got to find anything between £300 to £800 a year out that for Council Tax. It's not improving my health, and that's before ATOS comes round again. I had to appeal to tribunal last time, but got my ESA back. I'm not sure I've the strength to do that again. Tired.

  • rate this

    Comment number 38.

    Job Seekers is ~£3900 a year; my council tax would be ~£900. With food ~£2300 p/a that leaves £700 for gas, electric, water & any other bills you're tied to when you're ditched because of government cut backs.

    This constant government stigmatization & "beating" of the unemployed is disgusting. How about cutting back on HS2 or not getting involved in overseas disputes best left to the UN?

  • rate this

    Comment number 37.

    Think it is fair to ask everyone to contribute to council tax - we all make use of the facilities - even if it's only to have bins emptied and the streets lit.

  • rate this

    Comment number 36.

    hi Richard I have been paying Council Tax even though I have been on Benefit due to the fact that I get a little more than what the goverment say that you need so have to pay nearly full council and nearly full rent so my council tax bill for this year is £570

  • rate this

    Comment number 35.

    I nvever realised it was possible to avoid paying council tax. Its yet another reason whey the whole benefits system needs a complete overhaul. Too costly to run, too difficult to understand; the only winners are the ones who know how to cheat the system.Looks like the poll tax was the fairest system after all...

  • rate this

    Comment number 34.

    I'm not one to say I told you so but
    Everyone who voted tory in the last general election this is what you voted for ! The rich get richer and the less well off get stuffed. And before we get the moaners about labour and debt HELLO global crisis started in America and greedy bankers who are still sitting pretty. If those who had a personal wealth of 100m + more gave 10% no recession

  • rate this

    Comment number 33.

    "But the council believes it is right to ask everyone - including people on limited means - to make a contribution."

    Now where have I heard this argument before?
    I know Thatchers poll tax!
    Just watch it go up & up with each successive year until in the end we are back to everyone pays the same amount irrespective of whether you are a prince or a pauper.
    Don't you just love 'em conniving scumbags.

  • rate this

    Comment number 32.

    Council tax benefit bombshell to hit society's poorest


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